1946-59 trend projected. Should private and exempt carriage reach 39 percent in 1975, a rapid deterioration of regulated carriage could be expected, handicapped as it would be by the competition of unregulated carriage. The base of our transportation of freight in the last ✓ quarter of the century may be expected to be unregulated private and exempt carriers rather than the public carriers if present tends continue. Charts (1), (2), and (3) of exhibit A compare the trends in actual growth, relative growth and relative sharing of the regulated and unregulated freight carriers 1946-59. Chart (2) on relative growth reveals how the postwar economic expansion has been so largely to the benefit of unregulated carriers.

That the impact on the railroads as the principal public carrier is much more serious than on public carriage as a whole is shown on chart X, especially when we project the recent 1955-59 trend rather than the projection of entire postwar period as a base. The trend line established by the 1946-59 base averaging a fraction of 3 percent loss per year shows that by 1975 there would be a loss of 14 billion ton-miles out of a total volume of approximately 575 billion ton-miles. By using the 1955-59 basis for projection, railroad traffic decline reaches the alarming low level of 249 billion ton-miles in 1975 which is less than half of the traffic of 1955. The average projected rate of decline of over 3 percent per year since 1955 may prove excessive as a long-term rate. But, after making considerable allowance for this, the recent 5-year trend of railroad freight appears to offer substantial cause for alarm. Should it turn out to be an average annual decline of only 2 percent, it would in 15 years mean a 30 percent decline in railroad freight traffic; it is entirely unlikely that private ownership could survive. A deteriorating financial condition that would result from such a decline in traffic would tend to accelerate the railroads' inability to improve and modernize or even maintain facilities and service.

Billions of Ton Miles

CHART

0

*

Includes Railroads and other ICC regulated carriers.

We frankly face a shift from a private public carrier-based transport system to a private and exempt carrier-based system along with the prospect of Government-owned railroad industry. The latter would in all likelihood precipitate strict regulation of all the competitors of the Government-owned railroads as it has in other nations where nationalization of railroads has occurred.

The trend in annual Government expenditures as set forth in chart VIII, page 69, reveals that the annual expenditures have accelerated precipitously since 1956, largely because of the new highway system program. The projected railroad investment trend, shown in chart XII, based on 1946-59, is downward to a level of $909 million in 1975. It is unlikely that this figure can be approximated if the forecast of railroad traffic decline holds true. They just could not afford such an outlay. Pipeline investment will probably continue sharply upward, little affected by the growth of unregulated competition.

Chart XIV shows the aggregate growing investment in transport facilities from both private investment and Government expenditures for highways, waterways, and airways. Carrier investment figures represent book value of existing principal carriers reporting to the Interstate Commerce Commission or the Civil Aeronautics Board whereas public investment is cumulative of Government expenditures, past and planned.

CHART XI

Anticipated Annual Expenditures for Public

Investment in Transportation Facilities, 1961-1975

1961 62 63 64 65 66 67 68 69 70 71 72 73 74 75

0